China’s Securities Industry


China’s Securities Industry

Contents

The History

  • 1995, China’s first joint venture investment bank – CICC was established, its shareholders include Morgan Stanley International.
  • March 2002, Changjiang Securities and BNP Paribas signed the Sino-foreign joint venture securities companies’ framework agreement, which is the first joint-venture securities company established after China entered WTO.
  • June 2002, China Securities Regulatory Commission issued the “Establishment of Securities Companies with Foreign Equity Participation Rules” which set the maximum foreign stake as 33% and was implemented on July 1, 2002.
  • 2004, Goldman Sachs Group jointed with Gao Hua Securities to establish a joint venture Goldman Sachs Gao Hua Securities in order to enter China market.
  • September 2005, UBS Restructuring of Beijing Securities Project, preparation of UBS Securities was approved by the State Council. This is the first time for mainland to allow foreign institutions to own the management rights of mainland securities companies. This is also the first case for foreign institute to own the mainland securities license.
  • September 2006, China Securities Regulatory Commission (SCRC) announced a suspension on approval of new securities companies(including foreign-invested securities companies) and commercial offices
  • May 2007, in the Second Sino-US Strategic Economic Dialogue (SED), Chinese Government promised to resume the approval of new securities companies and declare a gradual expansion in the business scope of joint venture securities companies before the Third SED
  • December 2007, SCRC announced the resume of approval of Joint-venture securities companies and qualified securities companies can apply to set up.[1]
  • July 2007, SCRC announced a new regulatory classification base on securities companies risk managing ability and classified them into A (AAA, AA, A), B (BBB,BB, B), C(CCC, CC, C), D and E 11 classes.
  • December 2007, SCRC started to launch business license management on securities companies which indicate that securities companies’ ability on risk management will directly affect their capability in business scope, especially in the innovation business license[2]
  • 2007, 17 brokerages received A-class rating, in which 2 of them are AA while 15 are A in rating.
  • July 2008, 31 brokerages received A-class rating, in which 10 of them are AA while 21 are A in rating.
  • May26 2009, SCRC announced a new securities regulatory classification in order to improve the existing classification criteria of securities companies. Under new regulation, 30 brokerages received A-class rating, 58 in B-class rating and 17 in C-class rating.
  • China’s securities companies are facing more fierce competitors from outside investors. Goldman Sachs, UBS and many other international foreign institutions started to set up joint venture securities companies in China.[3]

Local securities companies

2010, there are 106 Members of Securities Association of China[4]

  • China Merchants Securities CO., LTD. (Public, SHA:600999)[5]
  • CITIC Securities Company Limited (Public, SHA:600030)[6]
  • Everbright Securities Co Ltd (Public, SHA:601788)[7]
  • Guosen Securities Co Ltd[8]
  • Haitong Securities Co., Ltd. (Public, SHA:600837)[9]
  • Huatai Securities Co., Ltd. (Public, SHA:601688)[10]
  • Ping An Securities Co., Ltd.[11]
  • Quangfa Securities Co., Ltd. (Public, SHE:000776)[12]
  • Goldman Sachs Gao Hua Securities[13]
  • Shenyin Wanguo (Hong Kong) Ltd. (Public, HKG:0218)[14]
  • BOC International (China) Ltd.[15]
  • Huatai United Securities Ltd.[16]

Rankings

Domestic rankings in 2010

  1. Sponsor representatives
Ranking Company No. of sponsor representatives No. of professionals
1 Guosen Securities[17] 139 400
2 CITIC[18] 91 583
3 Ping An[19] 84 266
4 Guangfa 76 300
5 Huatai 76 301
6 Haitong 70 230
7 China Merchants 70 254
8 Essense 60 230
9 Everbright 59 209
10 CICC 57 1249

2. Net brokerage revenue

Ranking Company Net brokerage revenue (RMB 1B) Market share among top 100 brokers (%) No. of branches Net brokerage revenue per branch (RMB 1M)
1 Galaxy 5.6 5.24 219 25.8
2 Guotai Junan 5.0 4.68 189 26.7
3 Guosen Securities[20] 4.9 4.54 68 71.9
4 Guangfa 4.7 4.39 194 24.3
5 Haitong 4.6 4.25 188 24.3
6 Shenyin Wanguo 4.4 4.05 149 29.3
7 China Securities 3.5 3.25 123 28.4
8 Huatai Lianhe 3.5 3.24 128 27.2
9 China Merchants 3.3 3.09 263 12.6
10 Qilu 3.3 3.08 140 23.7

3. Total assets

Ranking Company Total assets (RMB 1B)
1 CITIC[21] 109.4
2 Haitong 100.7
3 Guotai Junan 93.6
4 Guangfa 91.0
5 Galaxy 90.1
6 China Merchants 89.6
7 Huatai Lianhe 86.5
8 China Securities 66.9
9 Guosen Securities[22] 63.7
10 Shenyin Wanguo 60.2

Source: Securities Association of China[23][24]

Global rankings in 2010 & 2011Q1 1. Sponsored deals

Company 2011Q1 Ranking 2011Q1 Market share 2010 Ranking 2010Market share Change in market share
Deutsche Bank 1 8.60 4 5.3 3.3
Barclays Capital 2 6.80 12 2.2 4.6
Goldman Sachs 3 6.70 3 6.7 0.0
Citi 4 4.40 9 3.5 0.9
Guosen Securities[25] 5 4.10 14 1.7 2.4
BoA Merril Lynch 6 4.00 6 4.9 -0.9
Morgan Stanley 7 4.00 1 8.4 -4.4
DBS Group 8 3.80 39 0.5 3.3
JP Morgan 9 3.40 2 6.8 -3.4
Ping An[26] 10 3.00 13 1.9 1.1

Source: Bloomberg

Reference

External links

http://www.bloomberg.com http://www.sac.net.cn/ http://www.sac.net.cn/newen/home/index.jsp



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